[Federal Register Volume 60, Number 18 (Friday, January 27, 1995)]
[Notices]
[Pages 5443-5444]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-2070]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35255; File No. SR-DTC-94-17]
Self-Regulatory Organizations; The Depository Trust Company;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
Relating to Participation in the Lost and Stolen Securities Program
January 20, 1995.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on December 13, 1994, The
Depository Trust Company (``DTC'') filed with the Securities and
Exchange Commission (``Commission'') the proposed rule change as
described in Items I, II, and III below, which items have been prepared
primarily by DTC. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
\1\15 U.S.C. Sec. 78s(b)(1) (1988).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
DTC proposes to participate in the Securities and Exchange
Commission's Lost and Stolen Securities Program as a direct inquirer on
behalf of DTC participants that use DTC's branch receive service.\2\
\2\For a complete description of DTC's branch receive program,
refer to Securities Exchange Act Release No. 34600 (August 25,
1994), 59 FR 45317 [File No. SR-DTC-94-05] (order approving a
proposed rule change establishing a service for the routing of
securities certificates and related documentation to DTC).
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II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, DTC included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it has received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. DTC has prepared summaries, set forth in sections (A),
(B), and (C) below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
The purpose of the proposed rule change is to allow DTC to
participate in the Lost and Stolen Securities Program as a direct
inquirer on behalf of inquirers using DTC's branch receive service (DTC
Inquirers). When an appropriate securities certificate comes into DTC's
possession, DTC, acting on behalf of a DTC Inquirer, will make an
inquiry to the Commission's designee on behalf of the DTC Inquirer to
determine whether the certificate was reported lost, missing,
counterfeit, or stolen. When DTC is notified that the inquiry matches a
missing, lost, counterfeit, or stolen security report, DTC will provide
the DTC Inquirer with whatever related information the Commission's
designee provides to DTC. In addition, DTC will make, as appropriate,
reports to the Commission's designee on behalf of DTC Inquirers.
Currently, DTC participates in the Lost and Stolen Securities
Program by making inquiries and reports on its own behalf. The
Commission contemplated that the Lost and Stolen Securities Program
would allow the proposed structure of one reporting institution
assuming the inquiry responsibility of other reporting institutions.\3\
\3\For a detailed description of the Lost and Stolen Securities
Program, refer to Securities Exchange Act Release No. 13832 (August
12, 1977), 42 FR 41022 (implementation of program for reporting and
inquiring with respect to missing, lost, counterfeit or stolen
securities).
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DTC proposes to maintain and preserve in an easily accessible place
for a minimum of three years copies of all Forms X-17F-1A filed by DTC
on behalf of DTC Inquirers, all agreements with DTC Inquirers regarding
registration or other aspects of the Lost and Stolen Securities
Program, and all confirmations and other information received from the
Commission or its designee as a result of inquiry.
Section 17A(b)(3)(A) of the Act\4\ requires that a clearing agency
be designed to facilitate the prompt and accurate clearance and
settlement of securities transactions. DTC believes that allowing it to
act as Direct Inquirer is consistent with Section 17A(b)(3)(A) in that
it enables DTC to use its automated systems to make communications with
the Commission's designee faster and more accurate than such
communications otherwise might be made. Allowing DTC to act as Direct
Inquirer will allow participants in the branch receive program that may
not have a sufficient volume of securities transactions to otherwise
justify the expense of participating as direct inquirers to participate
as inquirers. Also, according to DTC, the rule change will permit the
Commission to capitalize on the natural synergy of allowing DTC, a
registered clearing agency, to act as a Direct Inquirer on behalf of
participants using DTC's branch receive program. These participants are
by virtue of their status as clearing agency participants automatically
``reporting institutions'' under Rule 17f-(1) of the Act\5\ and thus
are required to register with the Commission's designee unless an
exemption is available.
\4\15 U.S.C. Sec. 78q-1(b)(3)(A) (1988).
\5\17 CFR 240.17f-1(a) (1994).
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The proposed rule change will allow DTC to assist institutions and
the public in tracking and deterring trafficking in lost, stolen,
missing, and counterfeit securities thereby bolstering the
effectiveness of the Lost and Stolen Securities Program and reducing
the risk of financial losses that otherwise might occur. This promotes
efficiency in the clearance and settlement of securities transactions
and is consistent with Section 17A(b)(3)(A) of the Act. [[Page 5444]]
B. Self-Regulatory Organization's Statement on Burden on Competition
DTC does not believe that the proposed rule change will have an
impact or impose a burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
DTC has not solicited or received comments on the proposed rule
change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(iii)\6\ of the Act and pursuant to Rule 19b-4(e)(4)\7\
promulgated thereunder because the proposal constitutes a change in an
existing service of a registered clearing agency that does not
adversely affect the safeguarding of securities or funds in the custody
or control of the clearing agency or for which it is responsible and
does not significantly affect the respective rights or obligations of
the clearing agency or persons using the service. At any time within
sixty days of the filing of such rule change, the Commission may
summarily abrogate such rule change if it appears to the Commission
that such action is necessary or appropriate in the public interest,
for the protection of investors, or otherwise in furtherance of the
purposes of the Act.
\6\15 U.S.C. 78s(b)(3)(A)(iii) (1988).
\7\17 CFR 240.19b-4(e)(4) (1994).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street NW., Washington, D.C. 20549.
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for inspection and copying in the
Commission's Public Reference Section, 450 Fifth Street NW.,
Washington, D.C. 20549. Copies of such filing will also be available
for inspection and copying at the principal office of DTC. All
submissions should refer to file No. SR-DTC-94-17 and should be
submitted by February 17, 1995.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\8\
\8\17 CFR 200.30-3(a)(12) (1994).
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Jonathan G. Katz,
Secretary.
[FR Doc. 95-2070 Filed 1-26-95; 8:45 am]
BILLING CODE 8010-01-M
